Setting up a large theater in the court yard to serve the trial of the Chairman of Tan Hoang Minh Group

Lawyer Nguyen Van Tu, defending defendant Do Hoang Viet (Deputy General Director of Tan Hoang Minh), said that by March 15, four days before the trial, 1,420 people had submitted petitions for leniency for Do Anh Dung and his son. All petitions and related documents have been submitted to the trial panel.

The Hanoi People's Court announced that tomorrow's trial (March 19) will summon 6,630 victims - "most of whom are not professional investors". A large theater in the court yard has been set up to serve the large number of attendees.

On February 29, according to the announcement of the Trial Council (HDXX), hundreds of people were present at the headquarters of the Hanoi People's Court to register the list of victims for the upcoming trial. Among them, Ms. Huong (64 years old, residing in Hanoi) said that she had asked for a lighter sentence for Mr. Do Anh Dung and his son, because she realized that they had consciously compensated for the damage.

She said she used more than VND1 billion of her retirement savings to invest in Tan Hoang Minh bonds at the end of 2021. She had participated in a number of small "investment packages" of multi-level marketing companies, but later learned that they were all scams, so she was very scared. Therefore, she determined to only "do business with large companies, with clear and trustworthy brands". Buying Tan Hoang Minh bonds, according to her, is such an option.

The Supreme People's Procuracy's indictment also determined that people chose to buy Tan Hoang Minh's bonds based on four beliefs: believing that the bond packages were issued in accordance with the law; believing that the company had real cash flow to invest in projects; believing that the financial reports were honest; and believing that Tan Hoang Minh was a large, branded company.

But according to the prosecution's accusation, these four beliefs were built by Tan Hoang Minh through illegal acts.

Dishonest financial reporting

The Procuracy said that the financial difficulties of this group were revealed from the beginning of 2021. By June 2021, due to large debts, projects could not be implemented and the impact of Covid-19, the outstanding credit balance reached more than 18,500 billion VND.

To overcome the difficulties, Chairman Do Anh Dung directed his son, Do Hoang Viet, who is also the group's Deputy Director in charge of finance, to find ways to raise capital.

At this time, in addition to Tan Hoang Minh, Mr. Dung also had 45 other companies that he established but did not register them under his name but let acquaintances own them. Legally, the 45 companies operated and accounted for independently but were all under the control of Mr. Dung, the prosecutor accused.

Three of these companies were used by Viet for the capital mobilization plan for Tan Hoang Minh during the difficult period, including: Ngoi Sao Viet Company, Soleil and Cung Cung Mua Dong.

The plan consisted of three steps: using the three companies to issue bonds; creating fake contracts to sell to Tan Hoang Minh. Finally, the group would sell to "non-professional investors".

The reason why Tan Hoang Minh cannot issue bonds on its own is explained in Decree 153/2020. Accordingly, to be allowed to issue bonds, the first condition is:Businessmust pay in full all debts due within 3 consecutive years prior to the bond issuance.

Tan Hoang Minh does not meet this condition.

But Ngoi Sao Viet, Soleil and Cung Cung Mua Dong also revealed another shortcoming: the business results of all three companies were not qualified to issue bonds, the indictment stated. (Ngoi Sao Viet is also the enterprise that won the auction for the "golden land" of Thu Thiem on December 10, 2022 at a price of VND2.43 billion per square meter - a peak in the Vietnamese market, but the deposit was withdrawn after a month).

To qualify for bond issuance, Viet allegedly ordered chief accountant Phung The Tinh to edit the financial statements of these three companies "in a direction that was not true to reality." Mr. Tinh then continued to direct his subordinates to edit financial indicators, debts, and record false profits, the indictment stated.

Also according to Decree 153/2020, the remaining condition that enterprises must meet is that "these financial statements must be audited by a qualified auditing organization" and furthermore, must be "fully agreed upon" by this auditing organization.

To resolve this matter, according to the accusation of the People's Procuracy, Viet continued to direct Mr. Tinh and Hoang Quyet Chien (Deputy Director of the Center for Finance and Accounting) to find two auditing companies: CPA Hanoi and Nam Viet.

Mr. Tinh and Chien "agreed" with four leaders of two CPA companies, Hanoi and Nam Viet, to issue an audit report with an opinion "fully accepting" the financial report previously edited by Tan Hoang Minh without checking, the indictment stated.

The actions of the four audit company leaders were assessed by the Ministry of Finance's Inspection Team as "seriously violating Vietnamese auditing standards". The Procuracy also determined that this was the premise for the three companies, Ngoi Sao Viet, Soleil and Cung Cung Mua Dong, to issue bonds despite not meeting the conditions.

The project is not real.

From the beginning, in order to attract more bond buyers, Tan Hoang Minh has chosen non-convertible bonds without warrants. This means that the bonds that people buy will not come with the right to convert into shares or the right to buy shares of the enterprise.

The People's Procuracy stated that Tan Hoang Minh also chose bonds with collateral "to make buyers believe that the purpose of issuing bonds is to invest in real projects."

Because this is a type of corporate bond, assets such as real estate, machinery, equipment, stocks, etc. will be used to guarantee the issuance; in case of insolvency, these assets can be auctioned to recover money.

From July 2021 to March 2022, Ngoi Sao Viet, Soleil and Cung Cung Mua Dong issued a total of more than 90 million bonds, with face values ​​ranging from VND100,000 to VND100 million each. According to the announcement, the purpose of the issuance is to invest in buying shares of 4 other companies and to build a complex tourist area in Phu Quoc.

According to the conclusion of the investigation agency, more than 90 million bonds "were all created with fake documents and fraudulent behavior", "there was no use of bonds to invest in buying shares or building tourist areas". The companies that signed the investment cooperation "all belong to Tan Hoang Minh".

"The defendants forged 'fake' investment contracts between companies and individuals within the group, creating 'virtual' values ​​for the bonds," the indictment stated.

In order for Tan Hoang Minh to legally own more than 90 million of these bonds, Chairman Dung directed his subordinates to sign fake contracts to buy them back from the above 3 companies.

The People's Procuracy accused Tan Hoang Minh's account at this time only had 40-200 billion VND, while the total value of more than 90 million bonds amounted to more than 10,000 billion VND.

But in reality, all three companies belong to the Tan Hoang Minh "ecosystem", so his son came up with a plan to "recycle" the cash flow of the three companies, transferring it back and forth at least four times through the accounts of individuals in the group. From here, Tan Hoang Minh "collected" more than 10,000 billion VND to pay for 90 million bonds.

This means that the above 3 companies have spent their own money to buy their own bonds, but the ultimate ownership belongs to Tan Hoang Minh.

Mr. Dung was accused by the People's Procuracy of "dividing the maturity period, buying and selling many times", causing the initial bonds worth more than 10,000 billion VND to bring Tan Hoang Minh up to 14,000 billion VND, after selling all to "non-professional investors".

More than 90 million bonds with terms of 2-5 years, divided into weeks and months to sell and using money from the bond sales to pay (using money from later people to pay earlier people), more than 5,000 billion VND. Nearly 2,000 billion VND to pay bank debts; spending more than 800 billion VND for Mr. Dung's personal purposes... is "not in accordance with the purpose and plan of bond issuance", the indictment stated.

Therefore, the amount of money allegedly embezzled is the outstanding principal at the time Mr. Dung and his son were arrested and the case was prosecuted, totaling 8,643 billion VND.

All consequences of the case were remedied by Tan Hoang Minh and related individuals during the investigation phase, the People's Procuracy stated.

Trial of Mr. Dung, Viet and 13 others for crimesFraudulent appropriation of property, according to Clause 4, Article 174 of the Penal Code, will start from March 19, expected to last 20 days.

* The victim's name has been changed.